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Indonesia’s New Capital Looks to Attract Foreign Investors

As Jakarta sinks, the Indonesian government has released a slew of incentives to lure FDI to the $29.2B mega project

The FDI angle:

  • The new capital city of Nusantara is budgeted at Rp466tn ($29.2bn).

  • The state will cover only 20% of that, with the remainder expected to come from private investors.

  • “We are opening up our arms to foreign investors,” says the head of the Nusantara Capital Authority (OIKN).

  • After a challenging start, OIKN says it's receiving growing interest from international investors.

  • The current aim is to make the city both liveable and carbon-neutral by 2045.

Indonesia’s ambitious plan to move its capital to the brand-new city of Nusantara relies heavily on international investors’ help to build the Rp466tn ($29.2bn) mega project. With the state committing to funding just 20% of the cost of its development, the rise or fall of this new city depends entirely on attracting foreign direct investment (FDI).

“The government has always rightly focused on bringing in foreign investment to help them develop the country,” says Julian Smith, lead for environmental, social and governance (ESG), and government and infrastructure at PwC Indonesia. “It wouldn’t make sense to try to develop Nusantara without foreign investment because then it will be sucking investment away from other sectors of the economy.”


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